Our CEO, Dr. Nguyen Phuong Nam recently shared his valuable insights at the 76th Coffee Entrepreneur Program organized by the Ho Chi Minh City Business Association on the topic of Carbon Credit Trading. The event, themed “Carbon Credits: Who Sells, Who Buys?”, shed light on matters of carbon credit trading in Vietnam and globally.
As a speaker of the event, Dr. Nam elucidated on the regulatory landscape in Vietnam, emphasizing the significance of Decree No. 06/2022/NĐ-CP and its implications for businesses regarding carbon emissions offsetting. Specifically, businesses in Vietnam can only trade 10% of their total emission allowance, which is a good practice worldwide as the market for trading emission allowances has just been established.
However, due to the delay in the allocation of carbon allowances by authorized agencies in Vietnam until 2025, businesses are unable to accurately assess their carbon credit requirements for offsetting excess emissions or generating new credits without conflicting with mandated emission allowances. While awaiting the allocation of emission allowances based on Vietnam’s Nationally Determined Contributions (NDC), Vietnamese businesses can engage in voluntary carbon credit trading first. Once the mandatory domestic carbon credit market is established (which is planned for trial implementation in 2025 and full implementation in 2028), they can return to this type of market.
Dr. Nam also provided insights on global voluntary carbon markets, in which non-governmental organizations play a significant role in encouraging carbon trading practices and ensuring compliance with established standards. The voluntary carbon credit market worldwide is evolving rapidly, while currently in Vietnam, there have been entities registered for carbon credit creation through voluntary markets, “but it is unclear whether anyone has sold them yet” – said Dr. Nam.
Furthermore, Dr. Nam clarified misconceptions regarding carbon credit transactions and the allocation of funds. To be precise, “Instead of using funds from the budget, Vietnam utilizes money from the World Bank to compensate forest caretakers in the North Central region, rather than relying on income generated from carbon forest credits as per the usual principles of carbon credits. While some forest owners in Nghe An and Thanh Hoa provinces may have received this compensation, it is not necessarily due to their decision to sell carbon credits. This message is currently being inaccurately conveyed by the media.”
Dr. Nam also elucidated the rigorous process of obtaining carbon certifications and the associated costs, emphasizing the absence of a robust carbon credit market in Vietnam due to these complexities.
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